Business Law: Case Analysis Essay

Question:

Discuss about the Business Law for Case Analysis.

Answer:

Introduction

Negligence depicts the breach of duty of care on part of an individual, which they owed to some other person (Bailey, 2016). One of the crucial elements in establishing a case of negligence is foreseeability of the risk of harm or injury. In case a loss is caused, which was not foreseeable in a particular case, remedies cannot be awarded for the same as a result of the undertaken negligence (Gibson & Fraser, 2014). The case of Wyong Shire Council v Shirt (1980) 146 CLR 40, is a leading matter with regards to the foreseeability of harm, standard of care and for establishing a contravention of obligation of duty of care. This case is used as a benchmark and has forever established that to acknowledge the foreseeability of a particular loss, the view of a reasonable individual has to be considered (Latimer, 2012).

In the following parts, the various aspects of this case have been discussed, which includes the facts of this case, the decision of the case and also the arguments made by the plaintiff in this case. The purpose of doing so is to provide a conclusive summary of this leading matter.

Facts of the Case

In this matter, a channel had been dredged by the Wyong Shire Council, the defendant, in Tuggerah Lakes, New South Wales. The Council had erected the signs which red “Deep Water”. The plaintiff in this case was skiing in a circuit, and this circuit was regularly used by the water skiers. One day, while skiing, the plaintiff fell in the water and his head got struck on the bed of the lake. As a result of this, the plaintiff was injured gravely. The water of the lake was shallow at certain areas which caused the injuries of the defendant. A case was initiated by the plaintiff against the defendant for their negligence and he claimed damages for the undertaken negligence. The question in this case was that whether the council had been negligent or had their duty of care been discharged due to the signs erected by them regarding the water being too shallow. So, the court had to consider whether the council had undertaken the standard of care and acted in a reasonable manner, with regards to the risk of injury which could have taken place in the given circumstances to the water-skiers (Sappideen, 2009).

Side of Plaintiff

The plaintiff would like to initiate the claims by stating that the defendant had been negligent and had failed in their duty of care, which they owed to all those individuals who skied in the water of the lake. In order to establish a case of negligence, the plaintiff is required to show the presence of certain elements (Turner, 2013). These includes that the defendant owed a duty of care towards the plaintiff, the breach of it, the plaintiff being injured, the foreseeability of loss, the direct causation, and remoteness of losses (Greene, 2013).

To show that the defendant owed a duty of care to the plaintiff, the plaintiff would like to highlight the case of Donoghue v Stevenson [1932] UKHL 100. The court had stated that the proximity between the manufacturer and the consumer, and the foreseeability of a contaminated drink resulting in the injury of a party, led to S being held as having owed a duty of care to D and hence, had to compensate D for her losses, owing to her injury resulting from S’s negligence (British and Irish Legal Information Institute, 2017). In our case, the Council owed a duty of care towards the plaintiff, as they were the “manufacturer” of the channel and had to ensure that the place was safe for skiing. This is because the council knew that this place was regularly being used for such purposes (Australasian Legal Information Institute, 2017).

The plaintiff would also like to highlight that the duty of care was breached by the Council. In the matter of Roads and Traffic Authority of NSW v Dederer [2007] HCA 42, the plaintiff was injured due to the breach of duty of care on part of the defendant. Even though the defendant in that case had erected signs that prohibited people from jumping in the bridge, the same never showed that jumping in the bridge was dangerous (High Court of Australia, 2007). In the present case, the defendant had erected similar signs which showed that the water was deep. But, it was nowhere stated that the deep water could injure the skiing people or that jumping in water could be grave for the people. Hence, on the basis of Roads and Traffic Authority of NSW v Dederer, the defendant of this case has to be held liable for a breach of duty of care.

The next requirement is for the plaintiff to show the reasonable foreseeability of the risk of harm. For this, the plaintiff would like to take the help of ruling given in the Wagon Mound case, which is fully known as the Overseas Tankship (UK) Ltd v Morts Dock and Engineering Co Ltd [1961] UKPC 2. The court had held that due to the remoteness of injury, the damages could not be awarded. And it was also stated in this case that the foreseeability is present even in cases where it is a remote possibility (H2O, 2016). The court required that for proper discharge of duty of care, steps had to be taken to ensure that the injury does not take place. In this case, the defendant had only erected deep water sign, which was just information, instead of being a warning. Hence, the duty of care was not discharged, which resulted in damages which could not be stated as too remote (Australasian Legal Information Institute, 2017).


Bolton v. Stone [1951] AC 850, [1951] 1 All ER 1078 is another case which the plaintiff would like to use in this particular instance. In this case also, there was a lack of foreseeability, and so the damages were not awarded (Swarb, 2016). When the foreseeability of risk is to be asserted, instead of judging the improbability or probability of an occurrence, it is to be seen that the risk is not far-fetched. Even though there are cases where the possibility of one risk is higher than the other, it does not mean that the less likely risk is to be taken as not foreseeable. In this case, the defendant was aware of the fact that a person could be injured due to the shallow water. They knew people constantly used the place for different purposes and still they only erected a deep water sign. They did not take steps to make certain that the people had knowledge of the notion that jumping in the water could be dangerous. Based on Bolton v. Stone, the possibility of risk in the present case was quite strong and had to be considered properly (Jade, 2017).

It was easily foreseeable for the defendant that a person could get injured if they jumped in the water, as the water levels were different at different places. This knowledge was not with the plaintiff, but with the defendant. Hence, there was a clear foreseeability of risk of injury for the defendant and yet, they chose not to act on the same. The plaintiff would like to quote the case of Vaughan v Menlove (1837) 132 ER 490. In this case, as the defendant had not acted upon the warnings given to him regarding the improper ventilation at the building where he kept the haystack, a breach of duty of care was held and the defendant was held negligent (Commonwealth Legal Information Institute, 2017). In the same manner, by not choosing to act on the reasonable foreseeability of risk of harm, the Council in the present case breached their duty of care.

The plaintiff would again like to quote the case of Roads and Traffic Authority of NSW v Dederer. This is to show that by merely erecting a sign, the duty of care is not discharged. In this case, the court had held that by failing to erect signs which actually made the plaintiff aware about the possibility of harm, instead of providing simple information was a breach of duty of care on part of the defendant. This was coupled with the lack on part of the defendant in making fences or other similar guards, which could have actually stopped the people from jumping in the lake. A point which can be raised on this basis by the defendant of the present case is that in the quoted case, the plaintiff was 14 year old, and hence, did not have the understanding of the possibility of risk of harm (Hemming, 2007). However, the plaintiff would like to clarify, that any reasonable person, in the present circumstances, could not have judged that jumping in the lake could result in significant injury, as the sign actually showed deep water. The plaintiff was not aware of the fact that the surface was uneven at places and not actually deep. So, by jumping in the “deep water”, the plaintiff would not have been injured.

In other words, the signs failed to provide the correct picture. So, a person relying upon the sign may jump in the water, thinking that they would not hit their head, but in reality, they would get injured as the water was not deep. So, apart from informative sign, the plaintiff would like to highlight the negligence on part of the defendant in putting up mistaken signs. The plaintiff was an inexperienced skier and wanted to jump in deep water. He actually believed on the sign that the water was deep and jumped in the lake, not knowing that the surface was uneven. And due to this material breach in duty of care, the plaintiff would request the court to award suitable damages to the plaintiff, for the injury sustained by him (Jade, 2017).

Decision of the Court

In this particular case, the defendant was held liable for negligence and was required to pay damages to the plaintiff. This was because the court held that in certain cases, the standard of care is higher in such cases where the risk of sustaining grave injuries by a person is significantly high. Mason J, in this case held that for deciding upon the contravention of obligation of care, apart from the foreseeability of a risk, the response of an individual with regards to the consideration of the magnitude of risk of harm, along with the possibility of the occurrence of such harm and the expenses, difficulty and inconvenience in undertaking the actions to alleviate the risk, in addition to the other conflicting responsibilities of the defendant had to be considered (O’Grady, 2017). Hence, there was a need of balancing all of these considerations to assert a standard response, which is expected in the pertinent situation (Sander, 2017).

The judges also held that the foreseeability of harm cannot be fanciful or too far-fetched (Local Court, 2017). Hence, there has to be reasonable foreseeability with regards to the possibility of harm, for the harm to be stated as reasonably foreseeable. In the given case, the risk revolved around the ambiguity in the sign which had been put up by the defendant, which led people to form a view that the water was deep, and hence, safe for skiing. This particular aspect made the risk of injury sustained by the plaintiff as foreseeable. Due to these reasons, the council was held liable for the undertaken negligence in wrongly putting up the signs, which misled the people and was deemed as breach of duty of care on part of the council (Swarb, 2015).

Conclusion

This particular case is often cited in the matters where the foreseeability of a risk of harm has to be decided upon. In this case, the council had erected certain signs, believing which, the plaintiff jumped in the river and was injured. After establishing the presence of duty of care and the resulting harm, the question was raised on whether the loss was foreseeable. The court held that certain criteria, for instance, the probability of occurrence of loss and the degree of possibility had to be considered to establish the foreseeability. Though, the foreseeability cannot be something which is farfetched. And holding the breach of duty of care on part of the defendant, the council was held negligent.

References

Australasian Legal Information Institute. (2017). Wyong Shire Council v Shirt [1980] HCA 12; (1980) 146 CLR 40 (1 May 1980). Retrieved from:

Bailey, J. (2016). Construction Law (2nd ed.). Oxon: Routledge.

British and Irish Legal Information Institute. (2017). Donoghue v Stevenson [1932] UKHL 100 (26 May 1932). Retrieved from:

Commonwealth Legal Information Institute. (2017) Vaughan v Menlove. Retrieved from:

Gibson, A., & Fraser, D. (2014). Business Law 2014 (8th ed.). Melbourne: Pearson Education Australia.

Greene, B. (2013) Course Notes: Tort Law. Oxon: Routledge.

H2O. (2016). Wagon Mound (No. 1) -- "The Oil in the Wharf Case". Retrieved from: law.harvard.edu/collages/4919

Hemming, A. (2007). Roads And Traffic Authority Of New South Wales V Dederer: 20/20 Hindsight Or An Accident Waiting To Happen? A Timely Opportunity To Revisit And Reappraise Shirt. Retrieved from:

High Court of Australia. (2007). Roads and Traffic Authority of NSW v Dederer [2007] HCA 42. Retrieved from:

Jade. (2017). Wyong Shire Council v. Shirt. Retrieved from:

Latimer, P. (2012). Australian Business Law 2012 (31st ed.). Sydney, NSW: CCH Australia Limited.

Local Court. (2017). Moore v Pine Creek Community Council [2003] NTMC 008. Retrieved from:

O’Grady, P.T. (2017). Wyong Shire Council v Shirt [1980] HCA 12. Retrieved from:

Sander, S. (2017). New notions of personal responsibility in NSW civil liability. Retrieved from:

Sappideen, C., at al. (2009). Torts, Commentary and Materials (10th ed.). Pyrmont: Lawbook Co, pp. 374-5.

Swarb. (2015). Wyong Shire Council v Shirt; 1 May 1980. Retrieved from:

Swarb. (2016). Bolton v Stone: HL 10 May 1951. Retrieved from:

Turner, C. (2013). Unlocking Torts (3rd ed.). Oxon: Routledge.

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